19.10.202116:13:00UTC+00Hungary Central Bank Raises Rates Further

Hungary's central bank raised its interest rates in October, as signaled in previous months, for a fifth policy session in a row amid concerns over rising inflation and upside risks to the outlook.

The Monetary Council decided to raise the central bank base rate by 15 basis points to 1.80 percent, the Magyar Nemzeti bank said in a statement.

The previous change in the rate was a similar size hike in September. Policymakers also considered the need for a 15-basis point increase in the interest rate corridor. Consequently, the overnight deposit rate was hiked to 0.85 percent, and the overnight and the one-week collateralised lending rates were increased to 2.75 percent. "In the decision-makers' assessment, the inflation outlook continues to be surrounded by upside risks which might prove to be more persistent than earlier expected," the MNB said.

"For this reason, the Council considers it necessary to continue the monthly interest rate tightening cycle." Policymakers will continue the cycle of interest rate hikes until the outlook for inflation stabilizes around the central bank target in a sustainable manner and inflation risks become evenly balanced on the horizon of monetary policy, the central bank added.